The 9th Circuit Court of Appeals has ruled that Chase Bank may be liable for a false-reporting violation under the Fair Credit Reporting Act based on its allegedly inadequate responses to a report of identity theft. The appeals court reversed a summary judgment entered by the district court. The Plaintiff’s identity was stolen by a hospital worker when he received medical treatment. Subsequently, the Plaintiff learned that the identity thief opened an account in his name with Chase Bank. The Plaintiff notified Chase, but instead of deleting the account, the bank allegedly continued to report the fraudulent account as lost or stolen. In addition, Chase allegedly failed to block reporting of the account, despite receiving a “block notice communication” from credit agency TransUnion.
The Plaintiff had sued Chase under the Fair Credit Reporting Act. The 9th Circuit held that Chase’s duties under the Act were triggered by the block notice from TransUnion. Moreover, the Court concluded that a jury issue existed as to whether Chase violated the Act by reporting the fraudulent account as lost or stolen. In reaching this conclusion, the Court explained that, under the Act, an item on a credit report can be “incomplete or inaccurate” because it is “patently incorrect,” or because it is misleading in a manner that can be expected to adversely affect credit decisions. The Court said in its opinion:
Although we have never squarely addressed the issue, our precedent suggests that, at the very least, information that is inaccurate ‘on its face,’ is patently incorrect. A jury may well find that reporting the fraudulently opened account as a lost or stolen account belonging to [the plaintiff] was untrue or facially inaccurate.
This appears to be a very good decision and should put all banks on notice that this type of conduct won’t be tolerated. With identity theft being such a huge problem, banks must protect their customers to the fullest extent possible. The case is Drew v. Equifax in the U.S. Court of Appeals, 9th Circuit.
Source: Lawyers USA Online
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.